Brazil’s industrial production shrank 2.4 percent in January from the previous month, doing away with most of the 2.9 percent increase seen in December 2021. The result brings industry down 3.5 percent below February 2020, before the pandemic started. Compared to January 2021, the plunge reached 7.2 percent.
The data can be found in the monthly industrial survey released in Rio de Janeiro today (Mar. 9) by the country’s official statistics agency IBGE.
“We see that January has been heavily marked by the loss of dynamism and the widespread scope of the decline, as all major economic categories display a decline in production, both in comparison to the previous month and to January 2021,” survey manager André Macedo declared in a note.
The surge in December 2021, he said, may be linked to anticipated production, as January is usually vacation month.
Macedo also noted that industry’s poor January performance has been observed for a longer time, as 2021 saw a negative rate on eight occasions.
Activities on the wane
Comparing January 2022 and December 2021, 20 of the 26 industrial activities surveyed saw a drop in production. Compared to January 2021, 18 ed a decline.
“Industry has been affected by the undermining of production chains brought about by the pandemic, as production costs increased and supplies and raw materials for the production of the final product have become difficult to obtain, key though they are in this process. In addition, rising interest rates and inflation, along with a still high number of workers out of the labor market, help explain industry’s poor behavior,” Macedo declared.
Among all activities, the top negative influences from December 2021 to January 2022 reported were auto vehicles, trailers, and car bodies (-17.4%) and extraction (-5.2%), after rising 18.2 and 6 percent in the last two months of 2021 respectively.
Against January 2021, these activities also had the worst negative impact on the overall index, down 23.5 percent in the first and 6.7 percent in the second.
“The motor vehicle segment is a key example of the undermining of the production chain, as it faces difficulties obtaining important supplies for the production of the final product. The extractive sector, on the other hand, had its iron ore extraction greatly affected by the rains in Minas Gerais [state],” the research manager added.
